How I Paid Off $440,000 in Debt

In 2005, when my career as a creative director and tech writer took off, I was an über consumer, and things were good. Credit, and a lot of it, was available to me with seemingly no consequence. In fact, it was a lot like Monopoly money: I got the giant house, the great cars, the beautiful clothes, and it was all on credit — to the tune of about $500,000.

Sure, I was earning more than $250,000, but it wasn’t enough to cover the unforeseen (at least for me) collapse of the housing market, followed by America’s financial Armageddon. That left me at a significant loss, as creative projects (and therefore, my income) began to decline, a number of costly medical disasters cropped up and a big stack of bills increased. What’s more, I got a divorce and was paying out 50 percent of my income to my ex-other half, while I also assumed 100 percent of our debt. Ouch.

I drained my retirement account to pay off nearly $380,000 in debt, and still ended up with less than zero. Left with taxes and $120,000 in debt, my life was starting to resemble the Titanic, sans life boat.

But the wonderful thing about arriving at the bottom is that there is nowhere to go but up. I couldn’t help but be optimistic — I’m a glass half full kind of gal.

I knew that my life could not go back to what it was before everything came crashing down, and frankly, why would I want it to? It was stupid and frivolous. I came from very humble, do-it-yourself beginnings on a farm, so I knew I could get back to the basics. I just had to remind myself that the frugal life can also be a fun and creative life. Plus, I was newly single, and I wanted to get my stuff together in order to be a viable dating candidate. I’d have to start from scratch.

I began with a spreadsheet. Anything having to do with numbers makes my head spin, but I wanted to put all the figures in one place and look at it from a global point of view. I rewarded myself with a (cheap!) bottle of wine and got down to business. Laying it all out helped me to determine, cell by cell, what debt I could tackle immediately, what I should make payments on, how much I could pay, etc. I learned how extremely gratifying it is to highlight a row in red and mark it “PAID.” I made sure not to delete these paid lines, ever. It was a game: Once the spreadsheet is 100 percent highlighted, I realized, I am FREE!